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2012 Honda Civic Natural Gas (Photo credit: Honda Motor Co.)

The governors of Oklahoma and Colorado, two states with a vested interest in the natural gas industry, were in Detroit Monday, making the case for why U.S. automakers should produce more natural gas vehicles.

Governors Mary Fallin of Oklahoma and John Hickenlooper of Colorado carved out some time between meetings with General Motors, Ford Motor and Chrysler Group to talk with Forbes about their campaign to promote natural gas vehicles. "If you squint your eyes, and look at the way the world is, and the way it could be," said Hickenlooper, "if we had 20% of the country's vehicles running on natural gas, that helps everybody."

Motorists would save the equivalent of $1.50 to $2 per gallon on fuel, cars would pollute less and America would produce its own energy rather than relying on foreign oil, he said. "There are 26 states that have significant gas shale exploration so the jobs will be spread all over the country. Natural gas is cleaner, cheaper, keeps the world safer, and creates American jobs. So how do we get to that place?" he said.

Both Hickenlooper and Fallin know that CNG vehicles face a classic "chicken-and-egg" quandary: Consumers won't buy them if they're too expensive or too inconvenient to refuel. And carmakers won't build them without adequate demand.

Washington has been unable to adopt a national energy policy, so Fallin, a Republican, and Hickenlooper, a Democrat, are leading a bipartisan commitment by 13 states to purchase thousands of natural gas vehicles for their fleets as both a cost-saving measure and as an incentive for the industry to develop them. With the combined purchasing power of 13 states, Fallin and Hickenlooper hope to create enough momentum to justify the investment as a win-win for everyone.

"Chrysler told us they need to sell several thousand CNG vehicles" to make the investment economically feasible, said Hickenlooper. "To us that seems doable. It does to them, too."

Oklahoma this year plans to replace about 500 of the vehicles in its aging fleet of more than 11,000 cars and trucks, Fallin said. If every state did the same, the demand would be substantial, she said. Participating states include: Oklahoma, Colorado, Wyoming, Pennsylvania, Utah, Maine, New Mexico, West Virginia, Kentucky, Texas, Ohio, Mississippi and Louisiana.

The timing is right, added Hickenlooper. Many states have delayed their fleet purchases for the last few years because of budget shortfalls. So the pent-up demand is coinciding with the discovery of abundant new sources of natural gas in the United States. "If you can aggregate the demand, we think there will be a large order coming in," he said. "It's like a snowball going down a hill: once you get a few states to purchase cars, the costs come down....I don't think anybody has done this before."

The governors said they anticipate putting out a multi-state bid for the vehicles within a few weeks through the National Association of State Procurement Officials, which aggregates buying power for states on things like computers and other common purchases. They expect replies within a few months. It could take manufacturers a couple of years to develop the cars.

Aftermarket kits are already available to convert your car to run on natural gas, but so far, very few manufacturers sell factory-built CNG vehicles. Chrysler recently introduced the Ram 2500 heavy duty CNG pickup, and GM will soon start selling natural gas versions of its heavy duty pickups too. “Vehicles such as the Ram 2500 Heavy Duty CNG pickup meet today’s consumer needs without compromising tomorrow’s energy demands,” said Peter Grady, Vice President - Network Development & Fleet, Chrysler Group . “Also, ours is the only factory-built CNG-powered truck and is fully warranted by Chrysler Group.” Honda Motor is the only manufacturer selling a natural gas-powered sedan. So far this year, it has sold about 3,000 CNG-powered Civic compact sedans to fleets and dealers, but only in limited markets.

According to Hickenlooper, Chrysler provided figures showing that a CNG Ram pickup would cost about $11,000 more than a standard gasoline truck, but the owner would save $20,000 in gasoline over a five-year period, for a net savings of $9,000.

"The United States has an abundant supply of natural gas resources that are currently supporting millions of jobs throughout the country,” said Fallin. “By promoting CNG use, states are supporting the production of an American-made energy source that creates American jobs and reduces our dependence on foreign oil. While Washington struggles to find a coherent energy policy, states are leading the way in promoting cleaner, more affordable, American-made fuel sources."